Family Leave and the Impact on Pension Contributions and Benefits

Key Points

  • Whether pension benefits should continue to build up whilst an employee is on family leave depends on whether the employee is on a period of paid or unpaid family leave
  • Pension benefits should continue (and contributions paid) in respect of an employee on leave as detailed below for any period of paid leave (whether statutory or contractual). 
  • The extent to which there is an obligation on employers to continue to provide pension benefits during periods of unpaid family leave is an area of unsettled law. Many practitioners agree that during periods of unpaid leave, employers are under no legal obligation to pay contributions or provide benefit accrual unless the employee has a specific contractual right to such contributions or accrual.
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